First Screen

From “Preparing Effective Business Plans” by Bruce R. Barringer
Part 1: Strength of Business Idea
For each item, circle the most appropriate answer and make note of the (-1), (0), or (+1)
score.
Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Extent to which the
   idea:
    Takes advantage
   of an
   environmental
   trend
    Solves a problem
    Addresses an
   unfilled gap in the
   marketplace
   Weak Moderate Strong
2. Timeliness of entry to
   market
   Not timely Moderately timely Very timely
3. Extent to which the
   idea “adds value” for
   its buyer or end user
   Low Medium High
4. Extent to which the
   customer is satisfied
   by competing
   products that are
   already available
   Very satisfied Moderately satisfied Not very satisfied
   or ambivalent
5. Degree to which the
   idea requires
   customers to change
   their basic practices
   or behaviors
   Substantial
   changes required
   Moderate changes
   required
   Small to no
   changes required
   Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
   Part 2: Industry-Related Issues
   Low Potential (-1) Moderate Potential (0) High Potential (+1)
6. Number of
   competitors
   Many Few None
7. Stage of industry life
   cycle
   Maturity phase or
   decline phase
   Growth phase Emergence phase
8. Growth rate of
   industry
   Little or no growth Moderate growth Strong growth
9. Importance of
   industry’s products
   and/or services to
   customers
   “Ambivalent” “Would like to have” “Must have”
10. Industry operating
    margins
    Low Moderate High
    Part 3: Target Market and Customer-Related Issues
    Low Potential (-1) Moderate Potential (0) High Potential (+1)
11. Identification of target
    market for the
    proposed new
    venture
    Difficult to identify May be able to identify Identified
12. Ability to create
    “barriers to entry” for
    potential competitors
    Unable to create May or may not be able
    to create
    Can create
13. Purchasing power of
    customers
    Low Moderate High
14. Ease of making
    customers aware of
    the new product or
    service
    Low Moderate High
15. Growth potential of
    target market
    Low Moderate High

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
Part 4: Founder- (or Founders-) Related Issues
Low Potential (-1) Moderate Potential (0) High Potential (+1)

1. Founder or founders
   experience in the
   industry
   No experience Moderate experience Experienced
2. Founder or founders
   skills as they relate to
   the proposed new
   venture’s product or
   service
   No skills Moderate skills Skilled
3. Extent of the founder
   or founders
   professional and
   social networks in the
   relevant industry
   None Moderate Extensive
4. Extent to which the
   proposed new
   venture meets the
   founder or founders
   personal goals and
   aspirations
   Weak Moderate Strong
5. Likelihood that a
   team can be put
   together to launch
   and grow the new
   venture
   Unlikely Moderately likely Very likely
   Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
   Part 5: Financial Issues
   Low Potential (-1) Moderate Potential (0) High Potential (+1)
6. Initial capital
   investment
   High Moderate Low
7. Number of revenue
   drivers (ways in
   which the company
   makes money)
   One Two to three More than three
8. Time to break even More than two
   years
   One to two years Less than one year
9. Financial
   performance of
   similar businesses
   Weak Modest Strong
10. Ability to fund initial
    product (or service)
    development and/or
    initial startup
    expenses from
    personal funds or via
    bootstrapping
    Low Moderate High
    Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
    Overall Potential
    Each part has five items. Scores will range from -5 to +5 for each part. The score is a
    guide—there is no established rule-of-thumb for the numerical score that equates to high
    potential, moderate potential, or low potential for each part. The ranking is a judgment
    call.
    Score
    (-5 to +1)
    Overall Potential of the
    Business Idea Based on
    Each Part
    Suggestions for
    Improving the
    Potential
    Part 1:
    Strength of Business
    Idea
    High potential 
    Moderate potential 
    Low potential 
    Part 2:
    Industry-Related
    Issues
    High potential 
    Moderate potential 
    Low potential 
    Part 3:
    Target Market and
    Customer-Related
    Issues
    High potential 
    Moderate potential 
    Low potential 
    Part 4:
    Founder- (or
    Founders-) Related
    Issues
    High potential 
    Moderate potential 
    Low potential 
    Part 5:
    Financial Issues
    High potential 
    Moderate potential 
    Low potential 
    Overall Assessment High potential 
    Moderate potential 
    Low potential 
    Summary—briefly summarize your justification for your overall

Sample Solution